Cardlytics (NASDAQ:CDLX) executives said the company ended 2025 as a “leaner, more focused, and financially healthier” organization after what CEO Amit Gupta described as a strategic reset aimed at achieving self-sustainability. On the company’s fourth-quarter fiscal 2025 earnings call, Cardlytics detailed steps taken to streamline operations, modernize its technology stack, and reshape its publisher network, while also outlining near-term headwinds tied to the departure of Bank of America and content restrictions at another large financial institution (FI) partner.
Network changes and supply outlook
Gupta said Cardlytics conducted a comprehensive review of its FI relationships to ensure long-term alignment across economics, product direction, and consumer engagement. He characterized the company’s FI partnerships in the U.S. and U.K. as “durable and constructive” and said several are expanding, including the addition of new card portfolios with existing partners.
Management acknowledged the loss of Bank of America will create near-term pressure on supply, but said that impact is expected to diminish over time as existing partners launch more portfolios, user-interface enhancements increase participation, and new bank and non-bank publishers are added.
Beyond traditional banks, Cardlytics highlighted new publisher launches including the Philadelphia Flyers and Boston Celtics in sports, as well as ATM.com in financial services. Gupta said these launches are not expected to be material financially in 2026 but were encouraging as proof points.
On the call, CFO David Evans said Bank of America’s last campaign ran on Jan. 15, and that the “vast majority” of the decline embedded in first-quarter guidance is attributable to that departure, with content restrictions at another large FI partner also contributing. When asked about content restrictions through the year, Evans said the company believes it can get back to levels seen last summer, but that is “probably closer to the end of the year.”
Advertiser demand trends and category performance
Gupta said demand for Cardlytics’ ad format remained strong, with particular strength in grocery and convenience during the quarter. He pointed to a leading grocery retailer that increased spend to support targeted efforts for specific customer segments while meeting performance goals. He also said one fast-growing discount grocer increased spend 8x year-over-year based on measurable results verified by the advertiser’s team.
Gupta said Cardlytics has received feedback from advertisers in the U.S. and U.K. on its value proposition relative to competitors, including an example of a large U.S. retail brand that doubled quarter-over-quarter spend in Q4. He noted recent pressure in travel and entertainment and subscription services, while describing “green shoots” in other areas such as fashion and luxury, where advertisers increased spend 70% quarter-over-quarter.
The company also emphasized new business momentum. Gupta said Cardlytics added the world’s largest athletic apparel maker as an advertiser and recorded a 60% quarter-over-quarter increase in new business wins across e-commerce, retail, and restaurants in Q4.
In Q&A, management said investments in geo-targeting and omnichannel capabilities have been particularly helpful for advertisers with storefront and online channels, especially in grocery. Gupta also cited growth in other categories, stating gas and grocery saw about 21% year-over-year growth and restaurant delivery about 13% year-over-year growth. Regarding the subscription services softness, Gupta attributed pressure largely to restrictions from bank partners and the departure of Bank of America, and said Cardlytics is exploring new formats—particularly event-triggered concepts—to regain footing in that category.
U.K. strength and platform modernization
Gupta called the U.K. business a standout performer, saying fourth-quarter revenue surged more than 35% year-over-year. He said more than 40% of the U.K. business for the quarter came from grocery, including a top-three grocer that moved from pilots to a substantial increase in Q4 spend. With stable supply and focused execution, Gupta said the company sees its growth story being realized in the U.K., and expects to apply those execution lessons to a newly “settled” U.S. supply environment to return the domestic business to sequential growth.
On technology, Gupta said the company continued to modernize its platform and use AI to improve efficiency. He said Cardlytics migrated all partners to its ad server and fully deprecated its Offer Placement System globally. The company also transitioned from a legacy data warehouse to a unified data and AI platform on Databricks.
According to Gupta, these efforts enabled engineers to deliver features 20% faster while reducing infrastructure costs by 40%, and management said delivery issues experienced in 2024 and early 2025 are now “in the rear view.” The company also described deploying AI tools, including a customer support agent that resolves many partner and campaign inquiries in minutes rather than days or weeks.
Bridg divestiture and implications
Cardlytics said it signed an agreement in January for PAR Technology to become the new home for its Bridg business, citing ongoing bank data connection issues that left Bridg disconnected from Cardlytics’ core operations. Gupta said the company expects the transaction to close later in March and that completing the sale should strengthen the balance sheet and improve its path to self-sustainability.
In Q&A, Evans said the company expects to receive PAR shares based on a 15-day calculation and intends to liquidate the shares quickly to convert them into cash, with proceeds likely used to pay down a “decent amount” of the company’s credit facility. Evans also said Bridg will contribute revenue through the mid-month close contemplated for the deal.
Asked about SKU-level offers, Gupta said the company will put SKU-level targeting “on the back burner for now,” explaining it was primarily powered by data connected through Bridg. He said Cardlytics could still pursue it but would require more integration work with certain retailers.
Financial results and first-quarter outlook
For full-year 2025, Evans reported top-line billings of $385 million, down 13.3% year-over-year, and revenue of $233 million, down 16.2%. Adjusted EBITDA for the year was $10.1 million, up $7.5 million, as Cardlytics managed expenses amid supply constraints and posted a third consecutive year of positive Adjusted EBITDA.
In the fourth quarter, Cardlytics reported:
- Total billings: $94.1 million, down 19% year-over-year
- Revenue: $56.1 million, down 24.2% year-over-year
- Adjusted Contribution: $31.7 million, down 22.1% year-over-year
- Adjusted EBITDA: positive $8.5 million, up $2.1 million year-over-year
Evans said U.S. revenue excluding Bridg was $40.1 million, down 33.5%, driven by lower billings and pricing adjustments that reduced billings margins. He added that margin pressure was partially tied to strategic investments in certain advertisers and an isolated one-time variance in December delivery related to supply changes in the network. U.K. revenue was $10.8 million, up 35.1% year-over-year, which he said marked the U.K. business’s largest-ever quarter.
Adjusted Contribution margin expanded to 56.5% of revenue, which Evans said was the highest achieved to date and reflected a more favorable FI partner mix driven by newer FI partners. Adjusted operating expenses excluding stock-based compensation were $23.2 million, down $11.1 million year-over-year due to staff reductions in May and October and cloud optimization, with operating expenses also benefiting from $2.6 million in one-time ERC tax credit benefits.
Cardlytics reported operating cash flow of $13 million and free cash flow of $10.5 million in Q4, which Evans said improved by $11.9 million from the prior year due primarily to the lower expense base and the receipt of ERC tax credits in 2025. The company ended the quarter with $48.7 million in cash and cash equivalents and $40.1 million drawn on its line of credit after a net $6 million payment during the quarter.
For Q1 2026, Cardlytics guided to billings of $57.5 million to $63.5 million, revenue of $35 million to $40 million, Adjusted Contribution of $20 million to $23 million, and Adjusted EBITDA of negative $7.5 million to negative $3.5 million. Evans said the expected year-over-year billings decline of 41% to 35% is primarily driven by content restrictions at one of the company’s largest FI partners and the departure of Bank of America.
Evans added that revenue as a percentage of billings is expected to be in the low 60% range and Adjusted Contribution as a percentage of revenue in the mid-to-high 50% range, citing a higher-margin bank mix that allows reinvestment in advertiser and consumer incentives. The company expects first-quarter operating expenses to be at or below $27 million, excluding stock-based compensation and severance, representing a 27% reduction from the prior year.
About Cardlytics (NASDAQ:CDLX)
Cardlytics, Inc operates a purchase intelligence and marketing platform that connects advertisers with consumers through bank and credit card transaction data. The company partners with financial institutions to analyze anonymized purchase information, enabling brands to deliver highly targeted offers and rewards directly to customers’ online and mobile banking channels. By leveraging real-time insights into consumer spending habits, Cardlytics helps marketers optimize campaign performance and measure return on ad spend more accurately than traditional digital advertising methods.
At the core of Cardlytics’ offering is its proprietary purchase intelligence engine, which aggregates and anonymizes transaction data from partner banks and credit unions.
